E-mails 'said AIB had recourse only to land'

E-MAILS SENT by solicitors with the LK Shields law firm to the family of businessman Philip Lynch just hours before they signed up to a €25 million loan to buy lands with developer Gerry Conlan in Waterford stated that AIB only wanted recourse to the land, not the family, the Commercial Court heard yesterday.

A partner with LK Shields, Emmet Scully, told Michael McDowell SC, for the family, that the e-mails sent by other solicitors with his firm were based on information given to them by Ronan McLoughlin, a partner in Matheson Ormsby Prentice (MOP) solicitors.

In his evidence, Mr McLoughlin denied he provided information to LK Shields which could have led to the Lynch family being informed the loans were non-recourse.

The information he passed on came from AIB, he said, and was to the effect the bank had deleted a condition in a draft loan facility letter which provided for recourse to Philip Lynch and developer Gerry Conlan for the €25 million.

Mr McLoughlin denied a suggestion he had not told the LK Shields side AIB wanted to delete that clause because of concerns about enforcement issues for the bank.

Mr Justice Michael Peart heard evidence from Mr McLoughlin and has begun hearing evidence from Mr Scully in the action by Mr Lynch, his wife Eileen and their four children – Judith, Philippa, Paul and Therese.

In proceedings against AIB, LK Shields and MOP, the family claims the €25 million loan gives AIB no recourse to them for repayment. AIB insists the loan provides for full recourse to all borrowers and is counter-claiming for €25 million judgment orders against the family.

In cross-examination by John Gleeson for LK Shields, Mr McLoughlin agreed some correspondence sent by him referred to his “clients” as Mr Conlan and Philip Lynch and one letter sent by him referred to his clients as Mr Conlan, Mr Lynch “and others”.

He agreed the Lynch side paid half a €50,000 bill sent by MOP relating to Waterford. That was in accordance with the terms of a co-ownership agreement, he said. Mr McLoughlin agreed there was “nothing documented” to indicate LK Shields was contacting AIB concerning the loan facility letter.

Mr Gleeson said there were 11 letters or e-mails between Mr McLoughlin and AIB about the deal in January and February 2007 and Mr McLoughlin himself had told the court of numerous calls between himself and Derek O’Shea of AIB on the matter.

Mr Gleeson suggested notes by Imdaad Suleiman, then a solicitor with LK Shields, of contacts he had with Mr McLoughlin indicated that Mr Suleiman believed Mr McLoughlin was dealing with matters related to the AIB loan facility letter.

Mr Gleeson put those notes to Mr McLoughlin who rejected suggestions he did not tell Mr Suleiman that AIB had, on the evening of February 7th, told him it had enforcement concerns about the condition in the draft loan letter confining recourse to Mr Conlan and Mr Lynch and, for that reason, had deleted that condition.